Statement of changes in working capital, Cost Accounting

Assignment Help:

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular items and then try to categorize them in terms of decrease and increase in working capital. As working capital is measured through subtracting current liabilities from current assets, any raise in current assets and any reduce in current liabilities demonstrates a raises in working capital. Likewise, reduce in current assets and a raise in current liabilities represent a decrease in working capital.

 The statement of changes in working capital as Table no.1 explains that the raises in current assets amounted to Rs. 52 million, a main part of the increase occurring out of cash, inventory and receivable. Reduce in working capital came about mainly from the increased accounts payable, advances taken from customers and taxes payable. Total amount of reduce in working capital resulting from raise in current liabilities amounted to Rs. 25 million, hence showing a net raise in working capital of Rs. 27 million.

TOLLS INDIA LTD.

Statement of changes in Working Capital for the year ending December 31, 2000

                  (Rs. In Millions)

 

Dec. 31

2003

 

Dec. 31

2002

Increase

(Decrease)

Working Capital

Increase  Decrease

Current Assets

 

 

 

 

 

Cash

19.05

 

10.87

8.18

8.18

Accounts receivable

32.25

 

20.28

11.97

11.97

Loans and advances

42.58

 

33.82

8.76

8.76

Other current assets

17.20

 

15.93

1.27

1.27

Inventory

120.92

 

99.10

21.82

21.82

Total

232.00

 

180.00

52.00

 

 

 

 

 

 

Current Liabilities &

 

Provisions

Acceptances

4.74

 

3.02

 

 

1.72

 

 

1.72

Accounts payable

27.16

 

18.75

 

 

8.41

 

 

8.41

Advances against sales

26.60

 

20.28

 

 

6.32

 

 

6.32

Other liabilities

8.86

 

7.95

 

 

0.91

 

 

0.91

Interest accrued

2.64

 

2.00

 

 

0.64

 

 

0.64

Taxes payable

25.55

 

20.45

 

 

5.10

 

 

5.10

Proposed dividend

2.25

 

2.25

 

 

-

 

 

-

Bonus payable

3.40

 

2.35

 

 

1.05

 

 

1.05

Other provisions

3.80

 

2.95

 

 

0.85

 

 

0.85

Total

105.00

 

80.00

 

25.00

 

52.00

 

25.00

 

 

 

Working Capital

 

 

 

127.00

 

 

 

 

100.00

 

 

 

 

 

 

27.00

 

 

 

 

Increasing Working Capital

 

 

27.00

 

 

 

 

 

 

 

 

 


Related Discussions:- Statement of changes in working capital

Marginal cost, Marginal Cost Marginal cost is the change in a firm's co...

Marginal Cost Marginal cost is the change in a firm's cost of production. It is related to a unit change in its output, or the added cost of producing the next unit. The margin

Mr, Extracts from P Co''s records for last month are as follows: ...

Extracts from P Co''s records for last month are as follows: BUDGET ACTUAL PRODUCTION 7,000 UNITS 7,200 UNITS Direct Material $42,000 $42,912 Calculate

Standard cost and standard costing, Standard Cost and Standard Costing ...

Standard Cost and Standard Costing To effectively control the costs of a certain organization, we require a yard stick to measure the real performance against. Traditionally,

Standard cost, Standard Cost It is especially serious that you establi...

Standard Cost It is especially serious that you establish a link between standard budgets and costs. At this point, you require putting in your mind to standard costs one the

Traditional Overhead Allocation and Activity Based Costing, The controller ...

The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of fea

The weaknesses of an incremental budgeting system, Traditional budgeting  s...

Traditional budgeting  systems are  incremental  in nature and  tend  to  focus on  cost  centres.  Activity-based  budgeting  links  business  planning  to  the  budgeting  proces

Long run average marginal cost curves of the firm, Q. Let a firm's producti...

Q. Let a firm's production function be given by K 0.3 L 0.7 . (i) Sketch (without specific numbers) the shape of the long run average and long-run marginal cost curves of the fir

Computing information, This coursework is intended to help you develop your...

This coursework is intended to help you develop your understanding of shell scripting in both a Windows and Unix environment. You should undertake this coursework in groups cons

Compute the irr, Matheson Electronics' Canadian Branch will help introduce ...

Matheson Electronics' Canadian Branch will help introduce into Canada the just developed new electronic device which, when mounted on an automobile, will tell the driver how many m

Compute over and under absorption of variable overhead, Compute Over and Un...

Compute Over and Under Absorption of Variable and Fixed Overhead A company has a machine cost center for that the given information is available as a) Budget i. Budget

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd